Chile: Integrated assessment of the Ministry of Agriculture’s ...

Abstract: in Chile and Marianne Schaper from the United Nations Economic Commission for Latin America and ... conditions for Chile to participate in the global agricultural market in a sustainable way. ...

Chile: Integrated assessment of the
Ministry of Agriculture’s
Environmental Agenda:
With focus on forestry, pork meat,
and wheat sectors
Preface
To promote the sustainable use, protection and conservation of rural and natural resources have always
been an important role of the Chilean Ministry of Agriculture. In line with this responsibility, the Ministry
has embraced sustainable development as one of the main objectives for the agricultural sector since 1990.
This has led to a series of policy efforts aimed at introducing environmental management as an integral
component of the functioning of the agricultural sector.
Following the thrust of globalisation and trade liberalisation, in 2003 the Ministry prepared a draft policy
document entitled “Environmental Agenda of the Ministry of Agriculture”, or MAEA, aimed at aligning the
objective of environmental protection with the objective of increasing Chilean participation in the global
agricultural market. However, this preliminary agenda required a more comprehensive assessment of its
impacts and the involvement of institutions beyond the Ministry. Aware of these needs, the Ministry therefore
decided to participate in the Integrated Assessment and Planning (IAP) for Sustainable Development initiative
of UNEP, and designated RIDES as the institution to work in close partnership with the Ministry’s Bureau
for Agricultural Studies and Policies (ODEPA) to develop the project.
The main objective of this IAP project was to help in the design of the MAEA which could contribute to
sustainable development and poverty reduction in the rural sector by promoting sustainable trade in the
agriculture sector. It also aimed to improve the policy coherence of the MAEA in relation to the goals of
other governmental institutions, especially the National Environmental Commission and the Ministry of
Foreign Affairs. More generally, it pointed towards enhancing the capacity among governmental institutions
to undertake integrated assessment and planning for sustainable development of policies, plans and
programmes.
Although this IAP project made a series of important contributions to the MAEA, there are two aspects that
are most relevant. In the first place, it introduced a new structure to the MAEA by defining environmental
objectives on two levels: sector specific and crosscutting. While the sector specific objectives bring more
realism to environmental policymaking and are able to encourage compromise from the producers, the
crosscutting objectives permit the inclusion of a more territorial perspective for those natural resources
affected by more than one productive sector. Secondly, this IAP project allowed broad participation of
developmental actors such as NGOs, universities, the Government and the private sector. The Steering
Committee, the workshops and the working groups of the project made it possible for the Ministry to make
environmental objectives more transparent and accessible. At the end of the process, the atmosphere of trust
created by the project permitted the assessment of the productive sectors contained in this report, as well as
the ensuing policy recommendations, which reflect an important degree of consensus among the relevant
actors.

Integrated Assessment of Chlean Mnstry of Agrculture’s Envronmental Agenda
Despite the importance of these achievements, several challenges remain in order to successfully implement
the policy recommendations included in this report. Engaging the private sector and obtaining their solid
consensus and compromise is one of them. Thus, the Ministry will try to integrate these recommendations
into the agendas of the sector specific commissions that normally operate to discuss issues of public policy.
Assessing the financial implications of these recommendations and their impact on small farmers also needs
further attention. It is expected that the Ministry will address these issues during 2006 and 2007.
We hope that this document will be useful not only to those involved in the future of the agricultural sector
of Chile but also to a wider audience, including agricultural policymakers from other countries, researchers,
and all those interested in contributing to sustainable development.
Reinaldo Ruiz Valdés
National Director
Agrarian Policies and Studies Bureau
Ministry of Agriculture

Executve summary
This report is the result of an exercise which applied an Integrated Assessment and Planning (IAP)
methodology to the Chilean Ministry of Agriculture Environmental Agenda (MAEA). This policy initiative
aims to establish the conditions for Chile to participate in the global agricultural market in a sustainable way.
Although the MAEA is seen as a positive project by most interested actors, the policy document missed
two important elements. First, it was developed without any impact assessment. Secondly, it was developed
without the involvement of stakeholders beyond the Ministry of Agriculture. These gaps led the Ministry
of Agriculture to participate in the UNEP-sponsored IAP initiative. The Ministry selected the MAEA for
assessment, appointed RIDES as the project’s researcher and coordinator, and started the project in January
2004.
In general terms the project aims at three distinct but related objectives: (a) improving coherence between
the MAEA and the strategic goals of the Ministry of Agriculture, the National Commission on Environment,
the Trade Liberalization strategy of the Ministry of Foreign Affairs, and the Clean Production strategy of
the Ministry of Economics; (b) assessing the sustainability impacts of the MAEA and to suggest necessary
adjustments so that it promotes better environmental performance, reinforces sustainable trade in the
agriculture sector and helps reduce poverty; (c) enhancing the capacity to undertake integrated assessment
and planning for sustainable development and facilitate the design of policies, plans and programmes that
take into account economic, social and environmental aspects of development.
This IAP project was conceived from its start as one in which participation was crucial to its success. Thus,
for every objective and at every step of the project, participation has played a fundamental role. In this
respect, the project provided various spaces for different actors to express their concerns and interests in
relation to the MAEA. These included the sessions of the Steering Committee, the two national workshops
and the sessions of the thematic working groups.
The project had two basic stages: (a) a preliminary and general assessment of the MAEA; and (b) a more
specific assessment of the same policy initiative. The preliminary assessment had the objective of identifying
those substantive and procedural aspects of the MAEA that appeared as critical from a sustainable development
point of view. Most people involved in this assessment stage argued that the MAEA is an instrument
with the potential to contribute to improving the environmental performance of the agricultural sector in
Chile. Nevertheless, they also agreed in that in order to materialize the potential of the MAEA, it has to be
translated from a statement of intentions into concrete actions. This lack of concreteness is partly mitigated
by the fact that the MAEA is structured in terms of environmental objectives such as biodiversity protection,
clean production, soil protection and others. Although coherent in environmental terms, this approach is not
aligned with the strategy of the Ministry of Agriculture to structure policies around agricultural subsectors
and not environmental objectives.
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Integrated Assessment of Chlean Mnstry of Agrculture’s Envronmental Agenda
In view of the above, it was decided that the project should continue in its second stage with three major
concepts in mind: (a) to structure the assessment in terms of productive sectors and not in terms of
environmental objectives; (b) to make the appraisal participatory by establishing working groups for each
of the productive sectors being assessed and by involving them closely in the assessment phase; and c)
to adopt a scenario approach for the assessment of the productive sectors. Three productive agricultural
sectors were selected: forestry, pork meat and wheat. They were selected due to their relevance in terms of
environmental impact, trade, economic growth and rural poverty. After discussions by UNEP, ODEPA and
RIDES, a common assessment structure for the sectors was agreed:
• Description of the sector
• Barriers to sustainability of sector (economic, social and environmental);
• Policies attributable to the MAEA
• Scenario building for 2010 (scenarios with and without MAEA)
• Scenario assessment in terms of impact on sustainable development (trade, poverty and environment)
• Policy recommendations
The application of this methodology resulted in a series of recommendations and reflections. This IAP project
recommends firstly that the MAEA should be implemented because most measures in it designed to enhance
environmental performance in the agricultural sector in Chile are also sound in terms of strengthening the
competitiveness of most activities within it. For the forestry and pork meat sectors, increasing environmental
performance is crucial to competing in the international markets, while the wheat sector will benefit by
producing a quality of wheat suitable for the export-orientated salmon industry. Although it cannot be
determined that this positive relationship holds for all agricultural sectors, similar patterns can be found in
production of fruits, vegetables, wine and dairy products.
The MAEA’s impact on employment is less straightforward. In the forestry sector, the implementation of
the Native Forest Law will bring important changes in employment creation, although the tendency of
industrial activities to replace human capital with technological capital will see weaker employment growth
in the industrial sub-sector. The pork meat sector may experience a similar weak effect, as new employment
growth is expected to lag behind exports. In the wheat sector, the MAEA measures are expected to have
no impact on employment nor will they reverse the declining hiring trend. Such diverse consequences on
employment make it difficult to make generalizations. Although initially it may appear that the greening of
the agricultural sector in Chile will not affect employment growth negatively, each sector requires closer-up
scrutiny corresponding to MAEA implementation.
.
The impact of environmentally beneficial measures in the Chilean agricultural sector on rural poverty
reduction is also not uniform across its different activities. In the forestry sector the measures intended to
protect the native forest and ensure its sustainable use will greatly reduce poverty reduction as they bring
new economic opportunities to small and medium native forest owners. Something similar may happen with
measures intended at supporting sustainability in plantations owned by small and medium land owners.
However, measures addressing biodiversity and industrial concerns would have modest impacts in terms of
rural poverty reduction. At the same time, the measures assessed for the pork meat sector appear to slightly
and indirectly help in the reduction of rural poverty through the creation of new employment. In the wheat
sector, the environmentally beneficial measures assumed for the MAEA will have a more significant effect
in reducing rural poverty because they are intended to support poor small and medium land owners in their
production. As with increasing employment, the above analysis shows that the rural poverty impacts of
the MAEA will depend on the specific agricultural sector under focus and therefore that specific poverty
reduction analysis should be undertaken.
v
Executve summary
In general terms, this IAP project indicates that the MAEA should be broadly structured around two types
of instruments: (a) those that address widespread environmental problems in the agricultural sector and
therefore apply to various agricultural activities; and (b) those that address specific environmental problems
and are particular to individual activities of the agricultural sector. While recommendations specific to
the forestry, pork meat and wheat sectors are detailed in the main part of this publication, cross-cutting
recommendations for the MAEA are also given here:
• Develop a land-use planning instrument that clearly establishes the locations of different agricultural and
agro-industrial activities across the country
• Develop an environmental information system for underground water for the major agricultural basins of
the country
• Integrate soil conservation practices into all agricultural activities
• Integrate biodiversity protection into all agricultural activities
• Develop measures that support small farmers affected by more stringent environmental requirements
both financially and technically
v
Acknowledgements
This publication is based on the results from the Integrated Assessment and Planning (IAP) project
implemented in Chile from January 2004. UNEP would like to begin by thanking our project partners, the
Agrarian Policies and Studies Bureau (Oficina de Estudios y Política Agraria or ODEPA) of the Chilean
Ministry of Agriculture and Resources and Research for Sustainable Development (Recursos e Investigación
para el Desarrollo Sustentable or RIDES) for their cooperation and commitment.
UNEP would like to thank the project’s steering committee for its guidance. Members of the committee
include Fernando Baeriswyl, Nicola Borregaard, Guillermo Donoso, Francisco Gana, Omar Jofré, María
Isabel Manzur, Hugo Martínez, Horacio Merlet, Carlos Noton, Fernando Raga and Eda Rossi.
UNEP also would like to thank the project’s working groups for their contributions. Members of the groups
include Teresa Agüero, Gonzalo Aguilar, Carlos Cantuarias, Felipe de la Carrera, Claudia Carbonell,
Eduardo Fuentes, Patricio Grez, Mario Lagos, Andrés Laroze, Zandra Monreal, Juan Enrique Moya, Antonio
Ochagavía, Yorka Retamal and Ismael Tocornal.
Marcela Bochetto, Patricia Morales and Marcio Porto from the Food and Agriculture Organization (FAO)
in Chile and Marianne Schaper from the United Nations Economic Commission for Latin America and
the Caribbean provided important support to the workshops for the project. UNEP would like to express
its appreciation to them and their organizations. UNEP also thanks all the stakeholders for their active
participation in the workshops.
Edmundo Claro, Victoria Alonso and Beatriz Bustos of RIDES deserve special acknowledgement for
authoring this report.
An international group of experts provided important input to the project. UNEP would like to express its
gratitude to members of this group: Jiri Dusik, Jan Joost Kessler, Barry Sadler and Salah el Serafy, for their
time, effort, and advice, including comments on the draft version of this report.
UNEP also wishes to gratefully acknowledge the Norwegian Ministry of Foreign Affairs for its funding
support, which made this project in Chile and eight other countries possible.
At UNEP, the project was initiated and under the overall supervision of Hussein Abaza. Maria Cecilia
Pineda and Fulai Sheng coordinated this project and provided technical support. Desiree Leon facilitated
the processing of the report for editing and typesetting. Rahila Mughal provided administrative support for
the project.
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Integrated Assessment of Chlean Mnstry of Agrculture’s Envronmental Agenda
UNEP’s appreciation also goes to Ho Hui Lin of iPublish Pte Ltd for providing editorial and typesetting
services.
Notwithstanding the valuable contributions of many acknowledged here, the full responsibility for the
content of this report remains with the authors.
x
Unted Natons Envronment
Programme
The United Nations Environment Programme (UNEP) is the overall coordinating environmental organization
of the United Nations system. Its mission is to provide leadership and encourage partnerships in caring
for the environment, by inspiring, informing and enabling nations and people to improve their quality of
life without compromising that of future generations. In accordance with its mandate, UNEP works to
observe, monitor and assess the state of the global environment; improve the scientific understanding of
how environmental change occurs; and in turn, determine how such change can be managed by action-
oriented national policies and international agreements. UNEP’s capacity building work thus centres on
helping countries strengthen environmental management in diverse areas that include freshwater and land
resource management, the conservation and sustainable use of biodiversity, marine and coastal ecosystem
management, and cleaner industrial production and eco-efficiency, among many others.
UNEP, headquartered in Nairobi, Kenya, marked its first 30 years of service in 2002. During this time, in
partnership with a global array of collaborating organizations, UNEP has achieved major advances in the
development of international environmental policy and law, environmental monitoring and assessment, and
our understanding of the science of global change. This work also supports the successful development and
implementation of the world’s major environmental conventions. In parallel, UNEP administers several
multilateral environmental agreements (MEAs), including the Vienna Convention’s Montreal Protocol on
Substances that Deplete the Ozone Layer, the Convention on International Trade in Endangered Species
of Wild Fauna and Flora (CITES), the Basel Convention on the Control of Transboundary Movements
of Hazardous Wastes and their Disposal (SBC), the Convention on Prior Informed Consent Procedure
for Certain Hazardous Chemicals and Pesticides in International Trade (Rotterdam Convention, PIC) and
the Cartagena Protocol on Biosafety to the Convention on Biological Diversity as well as the Stockholm
Convention on Persistent Organic Pollutants (POPs).
Division of Technology, Industry and Economics
The mission of the Division of Technology, Industry and Economics (DTIE) is to encourage decision makers
in government, local authorities and industry to develop and adopt policies, strategies and practices that
are cleaner and safer, make efficient use of natural resources, ensure environmentally sound management
of chemicals, and reduce pollution and risks for humans and the environment. In addition, it seeks to
enable implementation of conventions and international agreements and encourage the internalization
of environmental costs. UNEP DTIE’s strategy in carrying out these objectives is to influence decision-
making through partnerships with other international organizations, governmental authorities, business
and industry, and non-governmental organizations; facilitate knowledge management through networks;
support implementation of conventions; and work closely with UNEP regional offices. The Division, with
its Director and Division Office in Paris, consists of one centre and five branches located in Paris, Geneva
and Osaka.
x
Integrated Assessment of Chlean Mnstry of Agrculture’s Envronmental Agenda
Economics and Trade Branch
The Economics and Trade Branch (ETB) is one of the five branches of DTIE. Its mission is to enhance the
capacities of countries, especially of developing countries and countries with economies in transition, to
integrate environmental considerations into development planning and macroeconomic policies, including
trade policies. ETB helps countries to develop and use integrated assessment and incentive tools for
sustainable development and poverty reduction. The Branch further works to improve our understanding of
environmental, social and economic impacts of trade liberalization and the trade impacts of environmental
policies, and to strengthen coherence between Multilateral Environmental Agreements and the World Trade
Organization. Through its finance initiatives, ETB helps enhance the role of the financial sector in moving
towards sustainability.
For more information on the general programme of the Economics and Trade Branch, please contact:
Hussein Abaza
Chief, Economics and Trade Branch (ETB)
Division of Technology, Industry and Economics (DTIE)
United Nations Environment Programme (UNEP)
11-13 Chemin des Anemones
1219 Chatelaine/Geneva
Tel : 41-22-917 81 79
Fax : 41-22-917 80 76
http://www.unep.ch/etb
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Table of contents
Preface ......................................................................................................................................... i
Acronyms and abbreviations .......................................................................................... iii
Executive summary .............................................................................................................. v
Acknowledgements .............................................................................................................. ix
United Nations Environment Programme .............................................................. xi
Table of contents .................................................................................................................. xiii
List of figures ........................................................................................................................... xiv
List of tables ............................................................................................................................. xv
List of boxes ............................................................................................................................. xv
1. Introduction .................................................................................................................. 1
2. The Environmental Agenda in a Developmental Context .................... 3
2.1 Socio-economic development in Chile .......................................................................... 3
2.2 Poverty and equity in Chile ............................................................................................ 4
2.3 The agricultural sector .................................................................................................... 4
2.4 Major environmental challenges .................................................................................... 7
2.5 The Environmental Agenda of the Ministry of Agriculture............................................ 8
2.5.1 Evolution of the Environmental Agenda ............................................................. 8
2.5.2 Stakeholder involvement ..................................................................................... 10
2.5.3 Intuitive opportunities and trade-offs of the MAEA .......................................... 10
2.5.4 Related policies and programmes ....................................................................... 11
3. Integrated Assessment of the MAEA ............................................................... 13
3.1 Preliminary assessment of the MAEA ........................................................................... 13
3.2 Methodology .................................................................................................................. 14
3.3 Forestry sector ................................................................................................................ 15
3.3.1 Basic information ................................................................................................ 15
3.3.2 Major environmental challenges ......................................................................... 17
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Integrated Assessment of Chlean Mnstry of Agrculture’s Envronmental Agenda
3.3.3 “Business as usual” scenario ............................................................................... 18
3.3.4 The MAEA scenario ............................................................................................ 21
3.3.5 Summary of assessment ...................................................................................... 24
3.3.6 Recommendations ............................................................................................... 25
3.4 Pork meat sector ............................................................................................................. 26
3.4.1 Basic information ................................................................................................ 26
3.4.2 Major environmental challenges ......................................................................... 28
3.4.3 “Business as usual” scenario ............................................................................... 28
3.4.4 The MAEA scenario ............................................................................................ 30
3.4.5 Summary of assessment ...................................................................................... 32
3.4.6 Recommendations ............................................................................................... 32
3.5 Wheat sector ................................................................................................................... 33
3.5.1 Basic information ................................................................................................ 33
3.5.2 Major environmental challenges ......................................................................... 35
3.5.3 “Business as usual” scenario ............................................................................... 35
3.5.4 The MAEA scenario ............................................................................................ 37
3.5.5 Summary of assessment ...................................................................................... 38
3.5.6 Recommendations ............................................................................................... 39
3.6 Cross cutting issues and recommendations .................................................................... 40
4. Conclusions and follow-up activities ................................................................ 41
4.1 Conclusions ..................................................................................................................... 41
4.1.1 The participatory process .................................................................................... 41
4.1.2 Role of the stakeholders ...................................................................................... 42
4.1.3 Awareness raising and capacity building ............................................................. 42
4.1.4 Effects on the MAEA and policymaking ............................................................. 43
4.2 Follow-up activities ........................................................................................................ 43
4.3 Some cautionary remarks about win-win-win policymaking ........................................ 44
List of references .................................................................................................................... 45
Annex: List of participants ............................................................................................. 47
List of figures
Figure 1: Agricultural sector GDP participation and growth ............................. 4
Figure 2: Average urban and rural total income ................................................. 5
Figure 3: Chile’s agricultural exports ............................................................... 5
Figure 4: Exports by sub-sector ......................................................................... 6
Figure 5: Absolute and relative employment in the agricultural sector ............. 6
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Table of contents
Figure 6: Urban and rural poverty ..................................................................... 7
Figure 7: Wood consumption 1990-2003 ........................................................... 15
Figure 8: Forestry GDP ..................................................................................... 15
Figure 9: Forestry exports ................................................................................. 16
Figure 10: Direct and formal employment in the forestry sector ....................... 16
Figure 11: Wood consumption 1990-2010, under scenario of “Business as
usual ................................................................................................................... 19
Figure 12: Forestry exports evolution 2004-2010, under scenario “Business as
usual” ................................................................................................................. 20
Figure 13: Wood consumption 1990-2010, under scenario with MAEA .......... 23
Figure 14: Internal consumption and exports of pork meat .............................. 26
Figure 15: Pork meat exports ............................................................................. 27
Figure 16: Direct employment in pork farms .................................................... 27
Figure 17: Internal consumption and exports 1996-2010, under scenario
“Business as usual” ............................................................................................ 29
Figure 18: Internal consumption and exports 1996-2010, under scenario with
MAEA ................................................................................................................ 31
Figure 19: Wheat cultivation and productivity 1989-2004 .............................. 33
Figure 20: Wheat production 1989-2004 ........................................................... 33
Figure 21: Wheat GDP ....................................................................................... 34
Figure 22: Wheat consumption .......................................................................... 34
Figure 23: Employment in the wheat sector ...................................................... 35
Figure 24: Wheat cultivated land and productivity 1993-2010 ......................... 36
Figure 25: Wheat consumption under scenario “Business as usual” ................. 37
List of tables
Table 1: Timeline of the MAEA planning process ............................................ 10
Table 2: Employment in the forestry sector 2003-2010, under scenario
“Business as usual” ........................................................................................... 20
Table 3: Employment in the forestry sector 2003-2010, under scenario with
MAEA ............................................................................................................... 23
Table 4: Forestry sector scenario assessment ..................................................... 24
Table 5: Pork meat sector scenario assessment .................................................. 32
Table 6: Wheat sector scenario assessment ........................................................ 39
List of boxes
Box 1: Stated objectives of the MAEA .............................................................. 9
xv
. Introducton
Integrating implies plurality. Without the presence of more than one concern, there is no need for integration.
Thus, with efforts to integrate policy assessments, the simultaneous adoption of a plural perspective when
designing policies becomes ideal. This project distinguishes between three kinds of pluralities. The first is
“substantive plurality”, which argues that reality is composed of different elements, and whose assessments
require different sets of indicators and measurements. The second is “procedural plurality”, which presumes
that policy development should integrate a broad range of relevant actors in both its design and assessment
phases. The third is “methodological pluralism”, which stands for expanding the repertoire of analytical
and participatory techniques used in the design of policies. This report is the finding of a two-year exercise
which began in January 2004 and applied an Integrated Assessment and Planning (IAP) methodology to a
specific public policy in Chile. The selected policy was the Ministry of Agriculture Environmental Agenda
(MAEA).
At the end of 2003, the Chilean Ministry of Agriculture developed the MAEA. It was aimed at establishing the
conditions for Chile to participate in the global agricultural market in a sustainable way. Although the MAEA
was seen by most actors in the agriculture/environment sector as a positive initiative, the policy document
neglected two important elements. Firstly, it was developed without any impact assessment. Secondly, it
was developed without the involvement of stakeholders beyond the Ministry of Agriculture. These gaps
led the Ministry of Agriculture to participate in the UNEP-sponsored IAP initiative. The Ministry, after
selecting the MAEA for assessment, appointed RIDES as the project’s researcher and coordinator. Project
commencement was in January 2004.
The main purpose of this IAP project is to promote an environmentally progressive MAEA, which will
reinforce sustainable trade in the agriculture sector and help to reduce poverty. Close-up, the project has
three distinct but related objectives:
(a) Coherence. To improve coherence between the MAEA and the strategic goals of the Ministry of
Agriculture and the National Commission on Environment; the trade liberalization strategy of the
Ministry of Foreign Affairs; and the clean production strategy of the Ministry of Economics
(b) Assessment. To assess the sustainability impacts of the MAEA and to suggest necessary adjustments so
that it promotes better environmental performance, reinforces sustainable trade in the agriculture sector
and helps reduce poverty
(c) Capacity building. To enhance the capacity to undertake integrated assessment and planning for
sustainable development and facilitate the design of policies, plans and programmes that take into account
economic, social and environmental aspects of development

Integrated Assessment of Chlean Mnstry of Agrculture’s Envronmental Agenda
This IAP project was conceived from its start as one in which participation was crucial to its success. Thus,
participation has played a fundamental role in every objective and at every step of the project. In terms
of coherence, this project has provided various spaces for different actors to express their concerns and
interests in relation to the MAEA. These included the sessions of the Steering Committee, the two Na